Editor’s Note: This forensic dive into one of South Florida’s most interesting stalled projects comes c/o Ed Bond, whose writing we at The Promote have long enjoyed. When we read his superb examination of Grant Cardone’s Bitcoin-fueled Boca bankruptcy YOLO play, we knew we had to have him as part of our stable of expert contributors. We’re grateful he agreed, and are thrilled to share his first piece for The Promote’s premium tier. Consider upgrading to get regular drops like these – founding memberships now live at $240/Y. - HS

By Edward Bond

When a prominent developer with extensive institutional relationships taps crowdfunding to raise equity, it’s worth a pause. Retail LPs – all due respect, but you aren’t the first call on good deals. 

In August, investors in One River Fort Lauderdale sued in Broward County Circuit Court, accusing sponsor OKO Group of raising capital for self-enrichment. The crux of the complaint is that the 251-apartment project landed a construction loan in June ‘22, but the project is yet to break ground – and it hasn’t even chosen a GC yet. The investors, some of whom came via crowdfunding platform CrowdStreet, kicked in between $25K and $400K, according to the complaint. 

OKO has denied all the investor allegations in court filings, and in a statement to TRD said that the claims are “false and without merit.” Still, a deep dive into the lawsuit and capital stack reveals a broader truth about the South Florida multifamily market, so it’s a worthy exercise.

Let’s start at the top.

Who’s Who in the Capstack

OKO is the development arm of Vlad Doronin, best known as the owner of ultra-luxe hospitality group Aman Resorts and the founder of Russian development firm Capital Group. OKO is involved in marquee projects on both coasts, including the trophy office tower 830 Brickell and the upcoming multibillion-dollar hospitality development known as One Beverly Hills. Its partner on both those projects is Cain International, a development firm helmed by Jonathan Goldstein with backing from Todd Boehly, the billionaire owner of Chelsea Football Club. 

In June 2020, OKO completed the assemblage of 6.7 acres of land in downtown Fort Lauderdale. The reported purchase price for the 27 parcels was $63M, financed with a $33M loan from MSD Partners. The assemblage included 6 parcels bought for $10.4M, with the address of 629 SE 5th Ave. This would be the site of One River.

Over the next 24 months, OKO worked through preconstruction. This included bringing in Cain as co-GP and other major capital partners. According to OKO’s Q1 2025 Investor Update (Exhibit C of the lawsuit), here are the key stakeholders:

Bank OZK is one of the most active construction lenders in the country, and JVP Management has become a go-to source of sr. debt, mezz and pref in the market, as The Promote has extensively reported on. So it’s a pretty star-studded capstack – which makes the CrowdStreet piece stand out like a sore thumb.

CrowdStreet and other crowdfunding platforms have come under fire in recent months, both for outright fraud (see Schwartz, Elie) conducted by sponsors who raised funds on their platforms and for a pattern of heavy losses borne by investors.  

Sources & Uses

Exhibits from the suit provide some color around the entity structure and capital stack. Based on these documents, the org chart likely looks like this:

The lawsuit was filed by 43 members of FPR 1 Member LLC accounting for just over $3M of LP capital. 

Per OKO’s Investor Update, here are the sources and uses:

The Sources confirm all LP equity was raised via CrowdStreet. Less than 12% of LP equity joined the lawsuit. Moreover, it represents less than 2% of the capital stack. This raises a question, why not just return their capital? Why spend the time, energy and money defending it?  

Between the Lines

Notice I emphasized Pro Forma Returns on the Sources and Uses. This isn’t final as changes must be expected.

In July ‘22, multiple publications ran a story about One River receiving $97.2M in construction financing. Most just parroted what OKO announced, but the South Florida Business Journal’s Brian Bandell actually took the time to review County records, which showed a Bank OZK mortgage totaling $75.7M. This remains the only mortgage recorded to date.

One would assume then that JVP, cited as the mezz lender in the Investor Update and in public announcements, would have kicked in the rest, about $21.5M in mezz. 

The Investor Update also mentions this financing, but this is old news. It was announced 3 years ago. The real news is that OKO is bracing the investors for a capital call. Here is the Capitalization section from page 6 of the Investor Update:

Notice the Sources section now has a mezz loan for $26.3M and a construction loan for $92.7M. The total is $119M, or $21.8M more than previously announced. Here is the Budget section from page 8 of the Investor Update:

Bank OZK has not committed to upsizing its construction loan. That’s why a mortgage modification hasn’t been recorded. I assume JVP has not committed to additional proceeds either. Both the senior and mezz lenders likely want additional equity. In fact, I wouldn’t be surprised if Bank OZK declines to offer more proceeds or even lowers the proceeds. Here is the Financing section from page 8 of the Investor Update:

Remember, the loan was originated in June ‘22 and we’re yet to break ground. The language above is basically OKO telegraphing that the loan is in technical default. Bank OZK does not have an obligation to fund the project. Moreover, the South Florida multifamily market outlook is much different today than it was when the loan was originated - “everyone is a net seller right now,” is how broker Miguel Pinto put it this summer.

The capstack is likely troubled. A capital call is likely coming for investors, and those who opt not to meet it will be diluted.

What’s Really Going On?

If you go back to the Capitalization section, there are two phrases that caught my attention:

“Sponsor equity commitments increased from $5.3 million in the initial underwriting to $12.8 million.”
“Construction has commenced on-site with equity funding development costs in accordance with the loan documents.”

Let’s start with the 2nd claim. A quick permit search shows all the permits are expired, and most of them expired years ago. Given OKO hasn’t retained a general contractor, this isn’t a surprise.

Google Earth does show some progress in terms of site work. Here are satellite images from January ‘22, March ‘23, March ‘24 and March ‘25:

It appears that little to no progress has been made since at least March ‘24. This aligns with the permit search history as only the residential demolition and landscape tree removal permits are showing as complete. Furthermore, there are 3 liens on the property totaling $53K. The information on the liens is further confirmation there has been little work on the site.

For the record, OKO claimed the construction permits were active as of Q2 2025. 

Which brings us back to the Sponsor equity commitment. OKO stated that the Sponsor has increased its commitment to $12.8M. However, the Sources section under “GP Equity” shows $22.6M. Which is it?

Frankly, it is unclear what the actual capstack looks like today. The Operating Agreement (exhibit A of the suit) isn’t executed and doesn’t contain a capital contributions table. The Subscription Agreement (exhibit B) is only from one investor. It outlines the generic terms of the agreement.

Given the fundraising environment in late ‘21/early ‘22, I assume OKO hit their minimum raise. If so, they should have a substantial amount of cash remaining, but it may be lower than expected due to the debt. I mentioned up top that MSD Partners (now rebranded BDT & MSD) provided acquisition financing for the entire 6.7-acre site OKO acquired in June 2020. On the same date that the Bank OZK mortgage was recorded, a partial release was also recorded:

Publicly recorded partial releases do not state the amount released so there is no way of knowing. However, either debt (Bank OZK), equity (LP capital), or a combination of the two were used to pay down the loan. This would put a strain on cash.

Finally, I doubt Bank OZK or JVP would keep their commitments without some monetary compensation along the way. Even if they do not have funds advanced, they still have to reserve capital for the project.

Feasibility

Ultimately, everything discussed thus far would be manageable if the project were feasible. Recall the Uses section:

OKO is projecting the total cost to be $670,000 per unit! Here are the sale comps provided in the Investor Update:

Even the ‘21-’22 multifamily boom didn’t touch One River’s cost to build and they still don’t have firm construction pricing.

OKO is underwriting to $3.60/foot in rent. Though that seems a tall order, here’s an aggressive pro forma:

This is why construction hasn’t commenced. The numbers do not work. Even under a very aggressive scenario, it’s unlikely to be profitable  

Let’s look at realistic numbers. OKO thinks their $3.60/SF rent projections are a discount to the market and that rental growth is expected to persist. However, being south of the New River, and on a non-waterfront site to boot, demands a hefty discount. Here is a map of the rental comps OKO provided:

The red rectangle is the site of One River. Las Olas Blvd is Ft. Lauderdale’s main business and entertainment corridor. Apartments on Las Olas command the highest premium. If you live on the south side of the New River, Las Olas is accessible by crossing one of two bridges or taking the water taxi. The Broward County courthouse and municipality buildings are also on the south side. While crime is low, it does occasionally attract the crazies. 

Finally, developers continue to deliver new product to Fort Lauderdale and its environs. The supply jump has caused Class A vacancy rate to increase to nearly 10%. Rent growth has been flat to slightly negative. Most of the rental comps are offering concessions, including weeks (or months) free. Perhaps this reverses by the time One River is actually delivered, but it’s hard to U/W to that scenario.

Here is my pro forma and implied valuation:

Based on the recent sales comps and pro forma NOI, low to mid $500’s per unit feels like a realistic exit. Obviously, this is well under the projected cost to build.

Finally, let’s look at this from the lender’s perspective. Remember, in July 2022, OKO announced they received $97.2 million in construction financing. Based on my stabilized NOI and the stated construction costs of $119 million, here’s how the loan sizes:

The loan was likely underwritten in early ‘22, given the Bank OZK mortgage was recorded in June ‘22. Interest rates were still at record lows, and the South Florida multifamily market was booming. The projected NOI was likely much higher. I can’t imagine Bank OZK and JVP increasing their proceeds. If they re-underwrite the loan, one would expect lower proceeds.

OKO has already signaled a capital call is coming. Construction bids are likely over $119 million and the lenders are adjusting their proceeds based on today’s market. This leads me to my final question: What is the point in proceeding? Additional equity won’t magically make the project pencil. That’s what LPs might want to think about.- EB